PMI (pmi mortgage insurance) removal, easier than you think.
PMI Insurance (private mortgage insurance) is a cost added to the monthly payment of many home loans. PMI insurance helps protect home lenders against the costs of foreclosure. Mortgage insurance provides what the equity of a higher down payment would provide to cover a mortgage lender’s losses in the event of foreclosure.
The Homeowners Protection Act of 1998 establishes rules for automatic termination and borrower cancellation of Mortgage insurance on home loans. These protections apply to certain home loans signed on or after July 29, 1999 for the purchase, initial construction, or refinance of a single-family home. These protections do not apply to government insured FHA or VA loans.
For home loans signed on or after July 29, 1999, your PMI insurance must – with certain exceptions – be terminated automatically when you reach 22 percent equity in your home based on the original property value, if your mortgage payments are current. Your PMI mortgage insurance also can be canceled, when you request – with certain exceptions – when you reach 20 percent equity in your home based on the original property value, if your mortgage loan payments are current.
One exception is if your loan is “high-risk.” Another is if you have not been current on your mortgage payments within the year prior to the time of cancellation. A third is if you have other liens on your home. For these mortgages, your PMI mortgage insurance may continue. Ask your mortgage lender for more information about these requirements.
Did you know, even if you have not paid down your mortgage to 78% of your original purchase price, you can still ask the mortgage lender to remove this PMI mortgage insurance and the payment they charge you monthly? Many lenders will remove your PMI insurance when the value of your home has increased, your equity is above 20% and you have two years of a good payment history. You will have to provide the home lender with an appraisal to verify that your equity is above 20%.
Do this to get rid of your PMI…
1. Contact your lender.
a. Ask them to send you the procedures and requirements to cancel your Mortgage insurance.
2. Order a home appraisal.
a. If you meet your lender’s requirements, then order a real estate appraisal from a licensed or certified appraiser.
3. Request to cancel your PMI.
a. Providing you meet all lender’s requirements.
b. If the appraised value indicates you have 20% or more equity (appraised value minus loan balance equals equity)
…Then start saving money!
For more information, check out removepmi.net
Leeper Appraisal Services/California Appraisal provides home appraisals for PMI removal, estate appraisal and appraisals for mortgage lending.